Unpaid amounts in relation to mere lease of land (not amounting to a financial lease) cannot be treated as a financial debt
In a recent judgment, the Supreme Court held that New Okhla Industrial Development Authority (“Appellant”) is an operational creditor and not a financial creditor for the purposes of a corporate insolvency resolution process under the Insolvency and Bankruptcy Code, 2016 (“IBC”). The Appellant had claimed the unpaid amounts towards lease of land as financial debt and therefore it should be treated as a financial creditor under IBC.
For further details, please refer to the below document.
This Prism has been prepared by Harshil Shubham and Megha Saraf.